Songe LaRon had heard it before from venture investors: “So you’re making an app for Black barbers. How big could that market possibly be?”
The thing is, LaRon wasn’t making an app for Black barbers. He was making an app for all barbers. It didn’t matter how obvious it was that the app was the first of its kind, or that it would accelerate the increasing popularity of barbering. Investors immediately pigeon-holed him based on his race.
Misplaced assumptions aren’t the only challenge underrepresented founders face. Inclusion in VC funding is abysmal. Women receive only 3% of all venture capital, and less than 1% goes to Black founders. Worse, these effects compound: Black female founders receive only 0.0006%. Data on disabled founders is nowhere to be seen.
There’s clearly room for growth, and successful founders from minority groups—whether it’s race, gender, or disability—don’t let the odds hold them back. Whether you’re part of a minority yourself or just supporting the minority businesspeople around you, neither should you.
To date, LaRon and his app Squire have received more than $47 million in funding from eleven investors.
Here are eight strategies for overcoming the difficulties underrepresented founders and business owners face.
1. Focus on what you can achieve in the moment.
“Focus on the things building a company entails: building a product, understanding the business model early in the journey, customer experience, making sure your design resonates, focusing on the unit economics, understanding the financials, understanding what it takes to make it happen. Don’t get distracted by anything else.”—Reham Fagiri, Founder, AptDeco (TechCrunch Disrupt 2020)
Focus on things you can control. Getting distracted by the uncontrollable is a poor investment of your company’s most valuable resource: your time and your energy.
If you believe your product or service needs to exist, that’s justification enough to get started. Creating a company is a big task, but you can start small. Talk to your potential customers. Do the market research. There’s actually a lot you can do while working a day job, even if the hours are rough. Focus on how you can affect change today, and then take that leap. The odds will always be stacked against minority groups. Leap anyway.
2. Educate yourself.
“Education is invaluable. It’s the one thing that can take you from wherever you are now to wherever you want to go.”
—David Adefaso, Founder & CEO, Sootchy (Insights)
Lack of business skills and experience is one of the greatest factors impeding underrepresented founders of all minority groups. While all founders should make it a point to educate themselves relentlessly, underrepresented founders usually have to go above and beyond.
Online publications like GLOBIS Insights, local chambers of commerce, business councils, free webinars, or mentorship programs are all great resources to learn about business trends and gain advice. If you’re more serious, you can check out online courses through platforms like GLOBIS Unlimited. Even better, if you can afford it, consider an MBA.
3. Pre-empt assumptions and biases as much as you can.
“Include multinational people in your slide deck. These biases are unfortunate, but you have to find practical ways around them.”
—Songe LaRon, Founder & CEO, Squire (TechCrunch Disrupt 2020)
Once you figure out the assumptions people are likely to make about you, nip them in the bud.
For example, when VCs see a minority founder pitching, they tend to assume the product or service is for the founder’s minority only. Allowing them to walk away believing that is a disservice to your hard work. Even unintentionally giving this impression diminishes the returns a VC will envision. They’ll be less likely to invest.
But you can get around this. Be intentional about the way you speak, the language and images used in your slide deck, and what information you include about your background. Dispel assumptions before they have a chance to form.
4. Your network is your net worth.
“Seeking out and working in collaboration with others who share your interests and values will provide a stronger foundation, enabling you to reach a higher level of success than you would on your own.”—Porter Gale, Board of Directors, Reddit; Your Network is Your Net Worth, Author (Forbes)
Reddit’s Porter Gale made the idea that “your network is your net worth” famous in 2013 with her book of the same name. It’s just as true today. Research shows a founder’s network provides access to critical resources that help determine a company’s growth and impact.
Connections get you two important assets: wisdom and money. In such a high-pressure environment, founding a startup without some kind of mentor is asking for failure.
But choosing the wrong advisor is one of the most common and fatal mistakes new founders can make.
Embrace the social opportunities your startup journey has created for you, and get to know fellow and former founders. Data shows your company will be better for it.
5. Come to terms with the brutality of startup culture.
“Usually, if you’re average within a group of people that are all smart, motivated, and intelligent, you win. In the startup world, you lose.”—Michael Seibel, CEO, Y Combinator (TechCrunch Disrupt 2020)
The startup world is not a big company or a university—those are designed to help you succeed. The startup world is more like the sports world, says Michael Seibel, CEO of startup accelerator Y Combinator (YC). It’s brutal. There are a lot of people competing, but a tiny percentage of people succeeding.
“We tell YC batches that only about five companies [out of roughly 150] are going to succeed,” says Seibel.
The stakes are high because the money you’re spending isn’t yours—it’s investors’, and they want that money back and then some. You’re a bet, and they want to win. They won’t hesitate to light a fire under your butt to make that victory happen.
Sure, they’ll mentor you and help you develop your talent. But at the end of the day, if you’re not making money for them, their support will end.
So be aware of the odds. Being extraordinary is the only way to beat them.
6. Channel the advantages of adversity.
“Bias is as human as eating, drinking, and sleeping . . . so leverage it instead of taking it personally. [Experiencing gender bias is] an opportunity to quietly build strength and momentum so that when the right opportunity presents itself, [you]will be strong and well-prepared.”—Stephanie Lampkin, CEO & Founder, Blendoor (SHRM)
It’s called adversity for a reason, and don’t let anyone tell you otherwise. Still, people who experience adversity gain a few things to help with future challenges.
And startup culture? It’s challenging.
“The highs are high, and the lows are low,” says Reham Fagiri of AptDeco. “One of the hardest things to do is stay steady.” You’ll need resilience to endure those waves. Luckily, people with adverse backgrounds usually have higher-than-average resilience.
Members of underrepresented communities are exposed to a myriad of problems that aren’t being solved well. But that exposure can be a resource for nuanced business solutions.
Underrepresented founders are used to hearing their chances are slim. Rather than ignore that warning, use it to remind yourself how far you’ve already come.
7. Quadruple down on improving your business plan.
“The tolerance for early-stage risk from [social impact] funders is far, far lower than it ought to be . . . Always be ready to prove to any potential investor that you know how to execute, and that you have a robust and flexible [business] plan.”—Srin Madipalli, Founder, Accomable (UnLtd)
Don’t let the recent interest in social impact investing fool you: investors invest to make money. So your first move in the face of rejection should be to improve your business plan. Social impact pitches with wishy-washy numbers aren’t going to cut it.
“There’s a point . . . where people switch from believing in your vision of the future to believing your numbers. And if you can get to that point with better numbers than everyone else, you have a huge advantage,” says YC’s Michael Seibel.
Even a successful seed round doesn’t mean your business success is guaranteed. Neither is getting funded by a famous person. Count the number of failed investments in any big investor’s portfolio: it’s going to be a lot.
Avoid becoming your investor’s next failure by staying hungry and constantly improving your business plan. The better your pitch, the more people will believe in your success.
8. In the startup world, discrimination is just one more hurdle.
“[Biases] shouldn’t hold you back or demotivate you. Unlike the normal world, in the startup world, these challenges are merely three of the thousands that founders have to deal with.”—Michael Seibel, CEO, Y Combinator (TechCrunch Disrupt 2020)
Systemic discrimination is culturally ingrained and often presents a huge hurdle for both you and your investors to overcome. But believe it or not, relative to hurdles like fundraising or untangling legal knots, the resource-suck of discrimination may not be the worst of your problems.
If you have the grit to overcome other challenges, you have the grit to overcome biases and pattern recognition, too. Don’t let the odds get you down. Keep on fighting. Remember your purpose, and carry on.